By InvestAdvocate

Lagos (INVESTADVOCATE)- Transnational Corporation of Nigeria Plc (Transcorp) on Wednesday said its power subsidiary Transcorp Ughelli Power Plc (Transcorp Power) is owed about N25 billion.

“Since privatisation there has been delayed and sometimes partial payment for the electricity generated. This has led to the industry owing Transcorp Power about N25 billion. Other GENCOS are also owed,” the conglomerate said in an emailed statement to InvestAdvocate detailing key issues affecting the ability of most Generating Companies (GENCOs) to operate at peak levels and increase available capacity.

Other challenges faced by GENCOs Transcorp says is the lack of a cost reflective tariff that would most ideally generate revenue for the power generated, as tariff of generating companies have not been reviewed since May 2014 despite the major cost component that drives the tariff such as forex rate, inflation and Gas prices has increased significantly since the last review.

Another challenge mentioned is the lack of predictability as the activation of contractual agreements such as the Power Purchase Agreement which is a key ingredient of the Transmission Electron Microscopy (TEM) are yet to be effected, thereby creating uncertainty in the market in relation of cashflow planning and investments, Transcorp affirmed.

According to the conglomerate, about 35 – 40 percent of available capacity of the plant has been lost in the current year as a result of third parties actions such as gas outages /quality and incessant instructions from the National Control Centre (NCC) to reduce load due to inability of transmission to wheel the power

The company disclosed the NCC has begun issuing regular directives to GENCOs and DISCOs decreasing the amount of power that is generated and sent out. “Last quarter when lack of gas supply meant that, Transcorp Power had available 650 Mega Watts (MW), NCC rejected more than half of that; and DISCOs were ordered to go as low as 200 MW,” Transcorp said.